Hi, this is my first post but I am always looking here for advice.
I have been given a sticky problem to unpick. A person bought a motorhome in Nov 2011, and part exchanged their old van.
They were given an invoice detailing the part exchange, purchase price and outstanding balance which they paid. So far so good!
In Nov 2012, we were contacted by their accountant who told us that the van they had part exchanged had actually been held in their business so the trade in value should have been subject to VAT. We then had to refund them the £14,000 VAT they had been charged and we need to enter this into our records, both to cover the bank payment and also the VAT reporting.
I'm struggling a bit as to how to make this happen; Do I write a credit for the original invoice and reinvoice it as it should be or do I make an adjustment?
